An investigation into why a major housing project was never completed failed to probe the involvement of a major fraudster, council papers have revealed.

Lambeth Council appointed one of the world’s largest auditors, KPMG, to examine the breakdown of the Roupell Park boiler project, which aimed to provide a modern heating system for 569 homes.

The combined heat and power (CHP) project remains unfinished and more than £8m of taxpayers’ money was subsequently wasted.

But according to a report, which was due to be discussed at the council’s housing scrutiny sub-committee on Wednesday, February 1, the connection between the failed project and an elusive suspected con man, Alex Watson-Jones, was never properly investigated.

The report stated: “[KPMG] have confirmed that they were not requested to include the specific claims regarding the involvement of Alex Watson-Jones in the Roupell Park CHP.”

The council report’s authors instead claimed there was “no evidence” to suggest the former housing contractor played a “significant role” in the combined heat and power project, as he was dismissed “well before any subsequent overspends”.

But KPMG said there was “limited project management information available” for the project phases, which Mr Watson-Jones was involved in.

The report said: “The KPMG review concluded the very limited project management information available relating to phases one to three of the project, and the unavailability of members of staff involved in the procurement and management for that period of the project meant the review could only reach a limited understanding of the roles and responsibilities of the parties involved in the project.”

Councillor Peter Truesdale, Liberal Democrat spokesman for housing, said the report was “shocking”.

He said: “If you are a fraudster, you do not need very long to wreak mayhem.”

Mr Watson-Jones was arrested on suspicion of fraud in 2006 in connection with a separate council housing project, but never charged.

He is believed to have used several aliases during his career and his current whereabouts are unknown.

A council spokesman said some 13,000 documents were handed to auditors as part of an investigation into the failed boiler project and said the investigation into its failings had been “thorough”.

He said: “The CHP was an ambitious and complex project that stretched over many years and political administrations.

“Lessons have been learned about the scope and management of the project and our focus now is to ensure residents have cost effective and reliable power for the future”.

He added Mr Watson Jones’s involvement was separate to the overspend.